Wrap Text
Impact of adopting new accounting standards – Restatement of previously reported financial results
Sasol Limited
(Incorporated in the Republic of South Africa)
(Registration number 1979/003231/06)
Sasol Ordinary Share codes: JSE : SOL NYSE : SSL
Sasol Ordinary ISIN codes: ZAE000006896 US8038663006
Sasol BEE Ordinary Share code: JSE : SOLBE1
Sasol BEE Ordinary ISIN code: ZAE000151817
("Sasol" or "the Company")
Dear stakeholder,
Impact of adopting new consolidation suite of accounting standards – restatement of
previously reported financial results
On 1 July 2013, Sasol adopted a number of new International Financial Reporting Standards
(IFRS), which impacted the previously reported financial results of the group. These new
accounting standards include IFRS 10, Consolidated Financial Statements, IFRS 11, Joint
Arrangements and IFRS 12, Disclosure of Interests in Other Entities.
In accordance with the transition provisions, these standards have been applied with
retrospective effect resulting in a restatement of the previously reported financial
results. As part of our commitment to keep our stakeholders informed, this document provides
information on the restated comparative reporting periods that will be disclosed alongside
the group's results for the six months ended 31 December 2013.
This information is preliminary and has not been audited or reviewed by the Company's
auditors.
Yours sincerely,
Paul Victor
Acting Chief Financial Officer
03 March 2014
Johannesburg
1.Overview of reporting changes
The consolidation suite of standards, namely IFRS 10, Consolidated Financial Statements
(IFRS 10), IFRS 11, Joint Arrangements (IFRS 11) and IFRS 12, Disclosure of Interests in
Other Entities (IFRS 12) became effective for annual periods beginning on or after 1
January 2013. Accordingly, Sasol adopted these new accounting standards on 1 July 2013
which resulted in a restatement of the group's previously reported results for the years
ended 30 June 2013 and 2012 and the six months ended 31 December 2012.
IFRS 10, Consolidated Financial Statements
IFRS 10 replaces IAS 27, Consolidated and Separate Financial Statements, that addresses
the accounting for consolidated financial statements and SIC-12, Consolidation – Special
Purpose Entities.
This standard provides a single basis for consolidation with new criteria to determine
whether entities, in which the group has an interest should be consolidated.
The adoption of IFRS 10 has resulted in an existing subsidiary, National Petroleum
Refiners of South Africa (Pty) Ltd (Natref), in which the group has a 64% interest, being
accounted for as a joint operation using the line-by-line consolidation method.
No other material subsidiaries within the group were affected.
The group has applied IFRS 10 retrospectively in accordance with the transition provisions
and the results for the years ended 30 June 2013 and 2012 and the six months ended 31
December 2012 has been restated accordingly.
IFRS 11, Joint Arrangements
IFRS 11 replaces IAS 31, Interests in Joint Ventures, and SIC-13, Jointly-controlled
Entities – Non-monetary Contributions by Venturers and changes the classification for
joint arrangements.
Under IFRS 11, a joint arrangement is classified as either a joint operation or a joint
venture based on the rights and obligations of the parties to the arrangement, the legal
form of the joint arrangement and when relevant, other facts and circumstances.
IFRS 11 removes the option to proportionately consolidate joint ventures and instead, all
interests in joint arrangements that meet the definition of a joint venture under IFRS 11
must be accounted for using the equity method.
The adoption of IFRS 11 has resulted in the following changes:
Sasol's Previous Revised
interest classification classification
ORYX GTL Limited 49 Proportionately Equity
consolidated accounted
Sasol-Huntsman 50 Proportionately Equity
GmbH & co KG consolidated accounted
Petlin 40 Proportionately Equity
(Malaysia) Sdn. consolidated accounted
Bhd
Uzbekistan GTL 44,5 Proportionately Equity
LLC consolidated accounted
Arya Sasol 50 Proportionately Equity
Polymer Company consolidated accounted
(ASPC)(1)
Merisol LP(2) 50 Proportionately Equity
consolidated accounted
(1)The group disposed of its investment in Arya Sasol Polymer Company in August 2013. The
comparative periods for the years ended 30 June 2013 and 2012 and the six months ended 31
December 2012 have been restated in accordance with IFRS 11 to include this investment as
an equity accounted joint venture.
(2)In December 2012, Sasol acquired the remaining 50% shareholding in Merisol. Accordingly,
this investment was accounted for as a 100% subsidiary from 31 December 2012.
All other joint arrangements (including Sasol Canada and Natref), will continue to be
accounted for using the line-by-line consolidation method.
IFRS 12, Disclosure of Interests in Other Entities
IFRS 12 sets out the requirements for disclosures relating to an entity's interest in
subsidiaries, joint arrangements, associates and structured entities. These disclosures
will be provided in the group's annual financial statements for the year ending 30 June
2014.
Impact of new accounting standards on the group results
The impact of adopting IFRS 10 and IFRS 11 on the group results for the comparative
periods is indicated in the tables to follow:
Restated comparatives - 31 December 2012
Condensed consolidated statement of financial position at 31 December 2012
As Effect of
previously adopting IFRS Restated
10
reported and IFRS 11 R'm
R'm R'm
ASSETS
Property, plant and equipment 99 149 (8 637) 90 512
Assets under construction 38 452 (761) 37 691
Investments in equity accounted
joint ventures - 8 502 8 502
Investments in associates 2 487 14 2 501
Other long-term assets 6 306 (270) 6 036
Non-current assets 146 394 (1 152) 145 242
Inventories 24 069 (1 716) 22 353
Trade and other receivables 26 128 (918) 25 210
Cash 28 147 (2 238) 25 909
Other current assets 864 31 895
Current assets 79 208 (4 841) 74 367
Total assets 225 602 (5 993) 219 609
EQUITY AND LIABILITIES
Shareholders' equity 132 428 (38) 132 390
Non-controlling interests 3 294 (338) 2 956
Total equity 135 722 (376) 135 346
Long-term debt 21 402 (1 626) 19 776
Long-term provisions 10 991 (235) 10 756
Other non-current liabilities 23 135 (694) 22 441
Non-current liabilities 55 528 (2 555) 52 973
Trade payables and accrued
expenses 24 245 (1 707) 22 538
Other current liabilities 10 107 (1 355) 8 752
Current liabilities 34 352 (3 062) 31 290
Total equity and liabilities 225 602 (5 993) 219 609
Consolidated income statement for the period ended 31 December 2012
Effect of
adopting
As previously IFRS 10 and
reported IFRS 11 Restated
R'm R'm R'm
Turnover 85 440 (5 590) 79 850
Materials, energy and
(37 001) 468 (36 533)
consumables used
Selling and distribution costs (2 479) 131 (2 348)
Maintenance expenditure (4 427) 729 (3 698)
Employee related expenditure (9 915) 503 (9 412)
Exploration expenditure and
(777) (4) (781)
feasibility costs
Depreciation and amortisation (5 445) 431 (5 014)
Other expenses, net (3 841) 715 (3 126)
Translation gains / (losses) (299) 982 683
Other operating expenses (4 151) (128) (4 279)
Other operating income 609 (139) 470
Operating profit before
21 555 (2 617) 18 938
remeasurement items
Remeasurement items (2 621) 1 963 (658)
Operating profit after
18 934 (654) 18 280
remeasurement items
Share of profits of equity
accounted joint ventures, net of - 592 592
tax
Share of profits of
204 - 204
associates, net of tax
Profit from operations,
19 138 (62) 19 076
associates and joint ventures
Net finance income (654) 93 (561)
Profit before tax 18 484 31 18 515
Taxation (5 876) (63) (5 939)
Profit for the period 12 608 (32) 12 576
Attributable to
Owners of Sasol Limited 12 157 - 12 157
Non-controlling interests in
451 (32) 419
subsidiaries
12 608 (32) 12 576
Salient features for the period ended 31 December 2012
Effect
of
adopting
As IFRS 10
previously and IFRS
reported 11 Restated
Operating profit margin % 22,2 0,7 22,9
Return on equity % 19,3 (0,1) 19,2
Return on total assets % 18,6 0,3 18,9
Gearing % 6,6 (2,2) 4,4
Capital commitments R'm 64 299 (609) 63 690
Condensed consolidated statement of cash flow for the period ended 31 December 2012
Effect of
As adopting
previously IFRS 10 and
reported IFRS 11 Restated
R'm R'm R'm
Cash generated by operating activities 21 435 (2 716) 18 719
Net finance income received / paid 154 1 910 2 064
Tax paid (4 745) 40 (4 705)
Dividends paid (7 267) - (7 267)
Cash retained from operating
9 577 (766)
activities 8 811
Additions to non-current assets (14 350) 533 (13 817)
Acquisition of new or additional
interests in joint ventures (721) (361) (1 082)
Acquisition of new or additional
investments in associates (199) - (199)
Other net cash flows from investing
activities 906 (43) 863
Cash utilised in investing activities (14 364) 129 (14 235)
Share capital issued on implementation
of share options 227 - 227
Contributions from non-controlling
shareholders in subsidiaries 27 - 27
Dividends paid to non-controlling
shareholders in subsidiaries (248) 28 (220)
Net movement in long-term debt 7 522 269 7 791
Net movement in short-term debt 6 513 - 6 513
Cash effect of financing activities 14 041 297 14 338
Translation effects on cash and cash 249 (57) 192
equivalents of foreign operations
Increase in cash and cash equivalents 9 503 (397) 9 106
Cash and cash equivalents at beginning
of the period 17 838 (1 841) 15 997
Net reclassification to held for sale (29) - (29)
Cash and cash equivalents at end of
the period 27 312 (2 238) 25 074
Restated comparatives - 30 June 2013
Condensed consolidated statement of financial position at 30 June 2013
Effect of
As adopting
previously IFRS 10 and
reported IFRS 11 Restated
R'm R'm R'm
ASSETS
Property, plant and equipment 108 070 (7 081) 100 989
Assets under construction 41 244 (1 379) 39 865
Investments in equity accounted
joint ventures - 8 636 8 636
Investments in associates 2 676 12 2 688
Other long-term assets 7 903 22 7 925
Non-current assets 159 893 210 160 103
Inventories 24 056 (1 437) 22 619
Trade and other receivables 29 003 (663) 28 340
Cash 32 713 (1 410) 31 303
Other current assets 3 830 (30) 3 800
Current assets 89 602 (3 540) 86 062
Total assets 249 495 (3 330) 246 165
EQUITY AND LIABILITIES
Shareholders' equity 149 625 (42) 149 583
Non-controlling interests 3 650 (340) 3 310
Total equity 153 275 (382) 152 893
Long-term debt 22 357 (1 017) 21 340
Long-term provisions 12 397 (169) 12 228
Other non-current liabilities 25 341 (631) 24 710
Non-current liabilities 60 095 (1 817) 58 278
Trade payables and accrued
expenses 33 477 (985) 32 492
Other current liabilities 2 648 (146) 2 502
Current liabilities 36 125 (1 131) 34 994
Total equity and liabilities 249 495 (3 330) 246 165
Consolidated income statement for the year ended 30 June 2013
As Effect of
previously adopting IFRS 10
reported and IFRS 11 Restated
R'm R'm R'm
Turnover 181 269 (11 378) 169 891
Materials, energy and
consumables used (77 538) 921 (76 617)
Selling and distribution costs (5 371) 269 (5 102)
Maintenance expenditure (7 544) 301 (7 243)
Employee related expenditure (23 476) 999 (22 477)
Exploration expenditure and
feasibility costs (1 354) (15) (1 369)
Depreciation and amortisation (12 030) 909 (11 121)
Other expenses, net (6 841) 2 607 (4 234)
Translation gains 899 1 993 2 892
Other operating expenses (9 692) 803 (8 889)
Other operating income 1 952 (189) 1 763
Operating profit before
remeasurement items 47 115 (5 387) 41 728
Remeasurement items (6 487) 3 538 (2 949)
Operating profit after
remeasurement items 40 628 (1 849) 38 779
Share of profits of equity
accounted joint ventures, net of
tax - 1 562 1 562
Share of profits of associates,
net of tax 445 59 504
Profit from operations,
associates and joint ventures 41 073 (228) 40 845
Net finance costs (1 294) 155 (1 139)
Profit before tax 39 779 (73) 39 706
Taxation (12 597) 2 (12 595)
Profit for year 27 182 (71) 27 111
Attributable to
Owners of Sasol Limited 26 278 (4) 26 274
Non-controlling interests in
subsidiaries 904 (67) 837
27 182 (71) 27 111
Salient features for the year ended 30 June 2013
As Effect of
previously adopting IFRS 10
reported and IFRS 11 Restated
Operating profit margin % 22,4 0,4 22,8
Return on equity % 19,1 - 19,1
Return on total assets % 18,4 0,3 18,7
Gearing % (0,3) (0,8) (1,1)
Capital commitments R'm 67 752 (405) 67 347
Restated comparatives - 30 June 2012
Condensed consolidated statement of financial position at 30 June 2012
Effect of
As adopting
previously IFRS 10 and
reported IFRS 11 Restated
R'm R'm R'm
ASSETS
Property, plant and equipment 95 872 (10 658) 85 214
Assets under construction 33 585 (473) 33 112
Investments in equity accounted
joint ventures - 9 588 9 588
Investments in associates 2 560 11 2 571
Other long-term assets 6 265 (337) 5 928
Non-current assets 138 282 (1 869) 136 413
Inventories 20 668 (1 748) 18 920
Trade and other receivables 26 299 (656) 25 643
Cash 18 060 (1 897) 16 163
Other current assets 444 - 444
Current assets 65 471 (4 301) 61 170
Total assets 203 753 (6 170) 197 583
EQUITY AND LIABILITIES
Shareholders' equity 125 234 (38) 125 196
Non-controlling interests 3 080 (334) 2 746
Total equity 128 314 (372) 127 942
Long-term debt 12 828 (1 239) 11 589
Long-term provisions 10 518 (234) 10 284
Other non-current liabilities 21 204 (859) 20 345
Non-current liabilities 44 550 (2 332) 42 218
Trade payables and accrued
expenses 27 460 (1 548) 25 912
Other current liabilities 3 429 (1 918) 1 511
Current liabilities 30 889 (3 466) 27 423
Total equity and liabilities 203 753 (6 170) 197 583
Consolidated income statement for the year ended 30 June 2012
As Effect of
previously adopting IFRS
reported 10 and IFRS 11 Restated
R'm R'm R'm
Turnover 169 446 (10 332) 159 114
Materials, energy and
consumables used (80 410) 1 699 (78 711)
Selling and distribution costs (4 621) 435 (4 186)
Maintenance expenditure (7 421) 274 (7 147)
Employee related expenditure (19 465) 857 (18 608)
Exploration expenditure and
feasibility costs (1 045) 2 (1 043)
Depreciation and amortisation (9 651) 809 (8 842)
Other expenses, net (8 215) 1 164 (7 051)
Translation gains 243 496 739
Other operating expenses (9 874) 683 (9 191)
Other operating income 1 416 (15) 1 401
Operating profit before
remeasurement items 38 618 (5 092) 33 526
Remeasurement items (1 860) 83 (1 777)
Operating profit after
remeasurement items 36 758 (5 009) 31 749
Share of profits of equity
accounted joint ventures, net of
tax - 4 545 4 545
Share of profits of
associates, net of tax 479 (63) 416
Profit from operations,
associates and joint ventures 37 237 (527) 36 710
Net finance costs (1 234) 227 (1 007)
Profit before tax 36 003 (300) 35 703
Taxation (11 746) 245 (11 501)
Profit for year 24 257 (55) 24 202
Attributable to
Owners of Sasol Limited 23 583 (2) 23 581
Non-controlling interests in
subsidiaries 674 (53) 621
24 257 (55) 24 202
Salient features for the year ended 30 June 2012
Effect of
As adopting IFRS
previously 10 and IFRS
reported 11 Restated
Operating profit margin % 21,7 (1,7) 20,0
Return on equity % 20,3 - 20,3
Return on total assets % 20,0 0,2 20,2
Gearing % 2,7 (2,4) 0,3
Capital commitments R'm 45 819 (299) 45 520
2. Other elements of the financial statements
The adoption of IFRS 10 and IFRS 11 did not have a significant impact on the statement of
changes in equity or the statement of comprehensive income for the years ended 30 June
2013 and 2012 and the six months ended 31 December 2012.
3. Investor Relations contacts
Please feel free to contact us as follows:
- investor.relations@sasol.com
- +27 11 441 3113
03 March 2014
Sponsor: Deutsche Securities (SA) Proprietary Limited
Forward-looking statements:
Sasol may, in this document, make certain statements that are not historical facts and
relate to analyses and other information which are based on forecasts of future results and
estimates of amounts not yet determinable. These statements may also relate to our future
prospects, developments and business strategies. Examples of such forward-looking statements
include, but are not limited to, statements regarding exchange rate fluctuations, volume
growth, increases in market share, total shareholder return and cost reductions. Words such
as "believe", "anticipate", "expect", "intend", "seek", "will", "plan", "could", "may",
"endeavour" and "project" and similar expressions are intended to identify such forward-
looking statements, but are not the exclusive means of identifying such statements. By their
very nature, forward-looking statements involve inherent risks and uncertainties, both
general and specific, and there are risks that the predictions, forecasts, projections and
other forward-looking statements will not be achieved. If one or more of these risks
materialise, or should underlying assumptions prove incorrect, our actual results may differ
materially from those anticipated. You should understand that a number of important factors
could cause actual results to differ materially from the plans, objectives, expectations,
estimates and intentions expressed in such forward-looking statements. These factors are
discussed more fully in our most recent annual report under the Securities Exchange Act of
1934 on Form 20-F filed on 9 October 2013 and in other filings with the United States
Securities and Exchange Commission. The list of factors discussed therein is not exhaustive;
when relying on forward-looking statements to make investment decisions, you should
carefully consider both these factors and other uncertainties and events. Forward-looking
statements apply only as of the date on which they are made, and we do not undertake any
obligation to update or revise any of them, whether as a result of new information, future
events or otherwise.
Supplementary A billion
Please note: information is defined as one thousand million. All references to years refer to
the financial year ended 30 June. Any reference to a calendar year is prefaced by the word
Summarised results of the group's joint arrangements - The following table contains a summary of the results of the group's share in joint arrangements at 30 June 2013, based on the new IFRS 11
"calendar"
classifications
R' million ORYX Sasol Petlin Uzbekistan ASPC(1) Merisol(2) Other Total Natref Sasol Other Total joint
GTL Huntsman equity Canada operations
accounted
As at 30 June joint
2013 ventures
External non-current 5 095 945 550 344 - - 198 7 132 2 095 13 899 980 16 974
assets
Property, plant and 4 704 648 502 1 - - 87 5 942 1 976 7 170 226 9 372
equipment
Assets under 340 - 39 343 - - 9 731 118 6 668 542 7 328
construction
Other non-current 51 297 9 - - - 102 459 1 61 212 274
assets
External current assets 2 008 333 484 358 - - 270 3 453 329 2 822 1 449 4 600
Intercompany current - - - - - - - - 10 - 64 74
assets
Total assets 7 103 1 278 1 034 702 - - 468 10 585 2 434 16 721 2 493 21 648
Shareholders' equity 6 388 622 688 644 - - 294 8 636 207 15 659 1 861 17 727
Long-term debt 57 345 - - - - 3 405 1 191 1 215 1 407
Intercompany long-term - - - - - - - - - - 62 62
debt
Long-term provisions 26 17 - - - - 86 129 70 260 - 330
Other non-current 194 145 32 - - - 11 382 441 - (5) 436
liabilities
Current liabilities 438 149 314 58 - - 74 1 033 525 801 360 1 686
Total liabilities and 7 103 1 278 1 034 702 - - 468 10 585 2 434 16 721 2 493 21 648
equity
Carrying value of 6 388 622 688 644 - - 294 8 636
investment
Income statement
External turnover 4 790 705 1 213 - 4 134 401 (138) 11 105 479 600 401 1 480
Operating profit / 2 670 91 (62) (21) (1 323) 46 195 1 597 327 (1 919) 3 (1 589)
(loss)
Attributable earnings / 2 656 49 (49) (20) (1 237) 41 (48) 1 392 113 (1 912) 44 (1 755)
(loss)
(1)The assets and liabilities of ASPC was classified as held for sale at 30 June 2013.
(2)In December 2012, Sasol acquired the remaining 50% shareholding in Merisol. Accordingly,
this investment was accounted for as a 100% subsidiary from 31 December 2012.
Effect of IFRS 10 and IFRS 11 on the group consolidated results for the year ended 30 June
2013
IFRS 11 IFRS 10 Consolidation Total
R' million adjustments adjustments adjustments(1)
External non-current 7 132 1 610 (316) 8 426
assets
Property, plant and 5 942 1 139 - 7 081
equipment
Assets under construction 731 648 - 1 379
Other non-current assets 459 (177) (316) (34)
Investments in equity (8 636) - - (8 636)
accounted joint ventures
Current assets 3 453 202 (115) 3 540
Total assets 1 949 1 812 (431) 3 330
Shareholders' equity - 362 20 382
Long-term debt 405 612 - 1 017
Long-term provisions 129 40 - 169
Other non-current 382 249 - 631
liabilities
Current liabilities 1 033 549 (451) 1 131
Total liabilities and 1 949 1 812 (431) 3 330
equity
Income statement
External turnover 11 105 273 - 11 378
Operating profit 1 597 191 61 1 849
(1)Consolidation adjustments are in respect of transactions between group companies and equity
accounted joint ventures that are accounted for as external transactions
Date: 03/03/2014 07:32:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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